Land dispute delays Sri Lanka tire plant

LONDON — Plans to build a car tire plant in Sri Lanka have become bogged down in a fight over the sale of land for the $78 million project.

The proposed plant was unveiled in January by Nandana Jayadewa Lokuwithana, a businessman and head of UAE-based Ceylon Steel Corp.

The facility, it was announced, would be established in Sri Lanka's Horana district, under the auspices of Rigid Tyre Corp (Pvt) Ltd. and employ used equipment from Italy's Marangoni Group.

With the announcement, however, came media charges of a "sweetheart" deal for the 100-acre site, which was owned by the Sri Lankan government.

According to a January report by Sri Lankan Sunday Times, for instance, Mr. Lokuwithana gained the land under a 99-year lease for "just 100 rupees (60 cents) an acre" per year.

Speaking to European Rubber Journal, an industry insider said the deal had been "put on ice," as Sri Lankan government officials considered their handling of the project.

This, said the source, was particularly true with regards to the land deal "which was practically donated without any return to the owners."

As European Rubber Journal has previously reported, Italian manufacturer Marangoni is to provide the technology for the Sri Lankan tire plant from its now closed PCR production facility in Anagni, Rome.

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